Why IBM Is Eliminating Remote Workers Despite Millennial Demand for Flexibility

Last week, we learned that IBM, an early pioneer of the remote-work concept, is ending the practice for thousands of its employees. In a move reminiscent of the one Marissa Mayer made at Yahoo in 2013, IBM has said many employees who work from home will need to start making the daily commute again, and those who work from remote locations or at an office not located in one of six cities the company designated as its main office locations would need to move in order to keep their jobs.

It seems like a backward-looking move by a company that has had remote-work policies in place for the last several decades, long before they became commonplace. Today, 43 percent of American employees work remotely some or all of the time. Flexible working schedules and conditions consistently rank among the most important factors to millennial workers in particular. A full 85 percent of millennials want positions that allow them to telecommute 100 percent of the time, and 50 percent of millennials said they would change their job to have a flexible working location with the option to work off-site full time.

“As the trend for remote employees continues to rise, and as the workforce shifts to predominantly millennials, companies (like ours) who want to remain innovative need to be accommodating,” said Andy Baker, VP of Talent & Culture at Nerdio, a Chicago-based IT-as-a-service provider. “If not, you’ll risk losing top talent due to your lack of flexibility. We’ve discovered that our remote policy has been one of the greatest perks for our younger workforce.”

There are clear cost benefits to having a remote workforce. Baker says the cost of desk space, equipment, utilities and so forth can easily total tens of thousands of dollars per employee, per year. For small or midsize businesses, that can be the difference that keeps the proverbial lights on for another quarter.

There is also research to suggest that employees are more productive when they have flexible work situations. With the ability to create personal work environments best suited to individual needs, remote workers are theoretically more free of distraction and able to get more out of the workday.

“We haven’t found that remote working environments result in a loss of productivity or communication hiccups. In fact, remote working environments actually increase transparency, collaboration and communication with internal teams,” said Harry West, SVP of human capital management at Appirio, an Indianapolis-based IT consulting firm. “Cloud services like Google for Work, Salesforce, and WorkDay all enable direct access to information while allowing management to instantly course correct, provide feedback and give kudos to workers who are doing well, all in real-time.”

But despite IBM’s 19 straight quarters of decreasing sales, their margins aren’t so tight that they need the cost savings remote workers provide. Big Blue’s focus is instead on finding innovative ways to weather the transformation to third-platform technologies like cloud, artificial intelligence and mobile. And when it comes to environments that lend themselves to creating the Next Big Thing, there still may not be anything to compare to an in-person, collaborative environment. Research shows that engagement levels from employees who work remotely 100 percent of the time are among the lowest of any group—tied only with those who don’t have telecommute capabilities at all.

“Because of technology, the world is moving to a ‘work from anywhere’ state of being … but it’s not necessarily the right way to go for everyone,” said Nancy Sabino, CEO of SabinoCompTech, a VAR and IT service provider located outside of Houston. “You lose some of the human connection when your employees are all separated. Everyone should be able to be a part of that inside joke and not feel left out.”

Ideally, workers have a mix of in-office and remote work time. Giving employees telecommute privileges shows trust and can foster a feeling of being understood by employers, which is critical to creating a true team environment.

“Whether your workforce is remote or in-office, full employee engagement is the most important factor to productivity. For many employees, the flexibility of working remotely makes them feel supported, provides the autonomy they desire and keeps them engaged,” said Rob Bellmar, EVP of business operations at West Unified Communications. The research backs him up. A study by Gallup found employees who spend 60 to 80 percent of their time — or three to four days in a workweek— working off-site were significantly more engaged in their work.

In the end, it all comes down to the kind of company culture employers wish to create. “Company culture is essential to hiring, managing and keeping quality remote and in-office employees. It can be difficult to cultivate an in-office culture that spreads to remote employees, but companies need to make culture a priority,” said Bellmar.

It may be easier to create a collaborative and inclusive work-remote culture in tech than in many other industries, where familiarity with many of the tools and platforms that facilitate remote workforces is higher.

“Through the use of remote-friendly components, such as Google Hangouts for team/department/company meetings and dissemination of culture-building messages through other electronic means, culture can certainly be maintained,” said Baker.

“It’s no mystery why employees who must abide by a strict schedule, struggle through daily rush hour traffic, and deal with countless in-office distractions have higher stress levels. By allowing your staff to work remotely, you’re empowering them to excel in the environment of their choosing – all leading to happier, less stressed, and hence more satisfied and productive employees.”